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CONCORD - Gov. Maggie Hassan set a somber but optimistic tone in delivering her inaugural speech after she was sworn in as the state's 81st governor Thursday.

She told fellow Democratic Party members there is much to do to reverse what was done the past two years, but noted: "We will not be able to do everything all at once."

She urged lawmakers and the people of the state to come together and work cooperatively to solve the problems facing New Hampshire.

"I know that, together, we can build a stronger, more innovative New Hampshire, a New Hampshire where all of our citizens are included in our shared success and prosperity," said Hassan in her inaugural address.

The 54-year-old Exeter business attorney replaces former Gov. John Lynch, who served four, two-year terms and announced he would not seek re-election more than a year ago.

Hassan easily defeated Republican Ovide Lamontagne in November to become the state's second woman elected to the state's highest office. It was her first run for governor.

During the campaign, the former state Senate majority leader characterized Lamontagne as too extreme for New Hampshire and emphasized her bipartisanship.

In her speech Thursday, she called on lawmakers to end the bitter partisanship that characterized the past two years, when Republicans held super majorities in both the House and Senate.

"The people of New Hampshire have made it clear that they want to restore balance, that they want us to work together," Hassan said. "Let us promise ourselves today that we will meet our challenges by focusing on common-sense solutions born of collaboration. That we will work together to end the era of hasty, reactive government."

Hassan stressed the need for the state to make a greater commitment to higher education and pledged to begin restoring cuts in state aid made in the last state budget.

"Cutting state support for public education in half while lowering the tobacco tax two years ago was short-sighted. It hurt our young people and, if not quickly addressed, will impair our future economic prosperity," Hassan said. "We must begin to reverse course."

Hassan noted the challenges the state faces in producing a balanced budget for the next two fiscal years and said she would veto any sales or income tax bill that comes to her desk.

"While we are seeing signs of recovery and growth, we still face fiscal uncertainty," Hassan said. "We will need to be prudent as we develop our budget."

But she also warned "those on the other side, I ask you to recognize that there are some things that government must do - not only to help our most vulnerable citizens but also to provide the platform for economic growth. Needs do not go away simply because we don't fund them. And opportunities for innovation and growth can evaporate if we fail to make smart investments in a timely way."

She praised the state's tradition of inclusion, including gay marriage, where she said the state led the way without a court order.

"As has been true throughout our history, every time we bring more people in from the margins - into the heart and soul of our democracy - we get stronger," she said. "We believe in freedom and the value of every person. It is our duty and our destiny to extend the same freedoms we enjoy to all our people."

She thanked first responders, corrections officers and security personnel for protecting the safety of citizens and praised New Hampshire's veterans and members of the armed forces for their service.

And Hassan acknowledged the tragic shooting at Sandy Hook Elementary in Newtown, Conn., saying the state must find ways to make schools and towns safer. She stopped short of calling for additional restrictions on firearms.

She called on lawmakers and the people of New Hampshire to join together to improve the state.

"The doors of this State House are open to all who want to engage, learn, and contribute," Hassan said. "It will take the ideas and spirit and energy of everyone. More so than any other place, New Hampshire is a government 'by the people.'"

Joined by her husband and family, Hassan was sworn in by Supreme Court Chief Justice Linda S. Dalianis, the first woman to hold the court system's highest position.

Her husband, Tom, is principal of Phillips Exeter Academy. They have two children, Ben and Meg.

Hassan served three terms in the state Senate and lost her reelection bid in 2010 in the Republican landslide.

After the inauguration ceremony and a brief Executive Council meeting, Hassan hosted an open house at the State House for the residents of the state.